|
THE
MINISTRY OF FINANCE
-------------
|
SOCIALIST REPUBLIC
OF VIET NAM
Independence -
Freedom – Happiness
--------------
|
|
No.
124/2004/TT-BTC
|
Hanoi,
December 23, 2004
|
CIRCULAR
GUIDING
THE IMPLEMENTATION OF THE REGULATIONS ON TRANSFER OF PROFITS ABROAD BY FOREIGN
ECONOMIC ORGANIZATIONS OR INDIVIDUALS, THAT EARN PROFITS FROM THEIR INVESTMENT
IN FORMS PRESCRIBED IN THE LAW ON FOREIGN INVESTMENT IN VIETNAM
Pursuant to the Law on
Foreign Investment in Vietnam, which was passed on November 12, 1996 by the
National Assembly of the Socialist Republic of Vietnam and the Law Amending and
Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam,
which was passed on June 9, 2000 by the National Assembly of the Socialist
Republic of Vietnam. Pursuant to the Government’s Decree No. 24/2000/ND-CP of
July 31, 2000 detailing the implementation of the Law on Foreign Investment in
Vietnam;
Pursuant to Enterprise Income Tax (EIT) Law No. 09/2003/QH11; Pursuant to the
provisions of the Government’s Decree No. 164/2003/ND-CP of December 22, 2003
detailing the implementation of the EIT Law,
The Ministry of Finance hereby guides the implementation of the regulations on
transfer of profits abroad by foreign economic organizations or individuals,
which are earned from the capital investment in forms prescribed in the Law on
Foreign Investment in Vietnam as follows:
I. SUBJECTS OF APPLICATION
This Circular applies to foreign
economic organizations or individuals that invest capital in forms prescribed
in the Law on Foreign Investment in Vietnam
(hereinafter referred collectively to as foreign investors), that transfer
their profits from Vietnam.
Profits, which can be
transferred abroad by foreign investors, as guided in this Circular, include:
- Profits distributed or earned
from investment activities under the Law on Foreign Investment in Vietnam;
- Profits earned from the
capital transfer after the fulfillment of EIT obligations;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
II. SPECIFIC PROVISIONS
1. Time for transferring profits
abroad:
Foreign investors may transfer
their profits abroad in the following cases:
1.1. Transferring annually or in
lump sum all distributed or earned profits at the end of a fiscal year and
after the submission of tax settlement reports to the tax offices.
1.2. Temporarily transferring
profits quarterly or biannually right in the fiscal year after the EIT has been
paid in accordance with the EIT Law (except for cases where foreign investors
are exempt from EIT under the Law on Foreign Investment in Vietnam and the
EIT Law).
1.3. Transferring profits upon
the termination of business activities in Vietnam
according to the provisions of the Law on Foreign Investment in Vietnam.
2. Determination of profit
amounts to be transferred abroad:
2.1. Profits to be transferred
abroad annually mean the profit amounts distributed to foreign investors in the
fiscal year after the fulfillment of tax obligations under the EIT Law, plus
(+) other profits earned in the year such as profits from the transfer of
capital or assets, the paid EIT amounts refunded to investors under the EIT
Law, minus (-) the amounts used or committed to use by foreign investors for
reinvestment in Vietnam, profit amounts used by foreign investors to cover the
expenses for their production/business activities or personal needs in Vietnam,
and profit amounts temporarily transferred in the year.
The income amounts to be
transferred abroad by foreign investors in the fiscal year shall be determined
after the enterprises submit their audited financial statements and tax
settlement reports of the fiscal year to the local tax offices managing the enterprises.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
The profit amounts to be
temporarily transferred abroad by foreign investors quarterly or biannually
right in the fiscal year mean the profit amounts distributed to the investors
on the basis of the enterprises’ quarterly or biannual financial statements,
equivalent to the profit amounts after EIT has been declared and paid, minus
(-) the profit amounts used by foreign investors for other purposes such as
reinvestment, expenses for production/business activities or consumption in
Vietnam.
In cases where the profit
amounts temporarily transferred abroad and spent in Vietnam by foreign
investors in the fiscal year are smaller than the profit amounts distributed to
them after the fiscal year ends (to be determined under Point 2.1 above), the
foreign investors may continue to transfer abroad the unused or non-transferred
difference amounts. In cases where the profit amounts temporarily transferred
abroad and spent in Vietnam
for other purposes by foreign investors are larger than the distributed profit
amounts, the difference thereof must be deducted into the profit amounts to be
transferred in the subsequent periods.
2.3. Profits to be transferred
abroad upon the termination of activities in Vietnam mean the total profit
amounts lawfully earned by foreign investors in the process of their investment
in Vietnam after the fulfillment of EIT obligations under the EIT Law, minus
(-) the profit amounts already used for reinvestment, profit amounts already
transferred abroad in the course of foreign investors’ operation in Vietnam and
amounts used for other expenditures of foreign investors in Vietnam.
In cases where foreign investors
have made EIT settlement and transferred their profits annually, they shall
make tax settlement and determine the remaining profit amounts to be
transferred abroad upon the termination of their operation.
3. Conditions for temporary
transfer of profits abroad:
3.1. Foreign investors that
invest capital in foreign-invested enterprises and/or foreign parties to
business cooperation contracts may temporarily transfer profits abroad
quarterly or biannually if they have made EIT declaration of the fiscal year
and temporarily paid quarterly EIT strictly according to the provisions of
Point 1, Section II, Part D of the Finance Ministry’s Circular No.
128/2003/TT-BTC guiding the implementation of the Government’s Decree No.
164/2003/ND-CP of December 22, 2003 which details the implementation of the EIT
Law.
3.2. Foreign investors must not
temporarily transfer the profits abroad quarterly or biannually as guided in
this Circular in the following cases:
- Profits are distributed to
foreign investors investing capital in enterprises which fail to make EIT
declaration for the fiscal year as mentioned at Point 3.1, Section II of this
Circular;
- The distributed profit amounts
are determined as not compliant with Vietnam’s current law provisions on
taxes and accounting;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
III. ORGANIZATION OF
IMPLEMENTATION
1. Foreign investors, when
carrying out the procedures for the transfer of profits abroad, must make
declarations on the transfer of profits abroad (according to a set form) and
send them to the local tax offices directly managing tax collection from the
enterprises which the foreign investors have made investments in.
The local tax offices shall have
to certify the paid EIT amounts related to the profit amounts requested for
overseas transfer by foreign investors within 7 working days, for cases of
periodical temporary transfer, or 15 working days, for cases of annual transfer
of profits and upon the operation termination. The tax offices’ certification
shall be inscribed in declarations on the transfer of profits abroad.
2. The tax offices shall not
certify the profit amounts requested to be transferred abroad by foreign
investors for cases mentioned at Point 3.2, Section II of this Circular and
cases where enterprises, which the foreign investors invest their capital in,
have violated tax legislation or other law provisions related to the
enterprises’ fulfillment of financial obligations.
In case of refusal to give such
certification, the tax offices must notify the foreign investors in writing of
the reasons therefor.
For enterprises’ profit amounts
not determined as compliant with Vietnam’s current tax law provisions and
accounting standards on the determination of revenues and expenditures, the tax
offices managing the enterprises shall have to request the enterprises to
re-determine them in compliance with current tax legislation provisions and
accounting standards; on that basis, the tax offices shall certify the paid EIT
amounts related to the profit amounts to be transferred abroad by foreign
investors.
3. Basing themselves on the tax
offices’ certification of tax obligation fulfillment and the foreign investors’
profit amounts to be transferred abroad, the banks where the foreign investors
open their accounts shall transfer the foreign investors’ distributed profits
abroad.
This Circular takes effect 15
days after its publication in the Official Gazette. In the course of
implementation, if any problems arise, organizations and individuals should
report them to the Ministry of Finance for timely settlement.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
FOR THE FINANCE
MINISTER
VICE MINISTER
Truong Chi Trung
APPENDIX
(To
Circular No. 124/2004/TT-BTC of December 23, 2004)
SOCIALIST REPUBLIC
OF VIETNAM
Independence - Freedom -
Happiness
DECLARATION
ON REMITTANCE OF PROFITS ABROAD
1. Name of investing foreign
organization or individual: ……………
Nationality:
…………………….........................................................
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
3. Address of the enterprise's
headquarters:
………………………………………………………….......................
4. Declaration of incomes
earned:
- From business establishment A:
Year:
Year:
- From business establishment B:
Year:
Year:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Already remitted or retained
overseas in the previous period: ……
- Already reinvested in Vietnam:
……………....................................
- Already used for other
purposes: ………………..............................
6. Incomes to be remitted abroad
this time:
If in currency, to be withdrawn
from account No.…. opened at…...... (We undertake that the aforesaid
statements are accurate and truthful.
Date:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
(Signature)
Tax office's certification:
- The investor has fulfilled all
tax obligations related to the income amount to be remitted abroad.
- The income amount allowed for
transfer abroad: ………….......
Date:
Director
of the Tax Department of .........… province/city
(Signature,
stamp)